[sbacic]

I suspect that the reason wealthy WE countries aren't investing in EE and the Balkans is that it is in general, a poor investment (due to corruption and brain drain).

The real question should then be - why is China investing in those same countries?

[forkLding]

You can actually gain a lot from investing in "poorer" Eastern European countries, like a lot of tech outsourcing occurs there because the intellecutual labour is much cheaper yet the quality of work is comparable to Western European standards.

A lot of products or scientific research can be made at a much cheaper price in East Europe and maybe even at a higher quality. The issue for Western European countries is that they don't need to and likely don't have the huge budget that China has to put into foreign investment. Also although China may seem like it is investing a lot, it's not much in terms of its budget so it seems much more affordable to China.

Also China is also investing in Western Europe as well, they are more or less doing a scattershot approach as can be seen by the German acquisition. Its probably just that Western Europe isn't as receptive and doesn't need as much.

[gingabriska]

It's not profitable because movement of skilled labor is free across whole EU.

If you've poor countries in EU then a company from rich EU country can easily buy large farmland or ship out dirty/sketchy industries (waste recycling companies who just set waste on fire) to poor countries. This way you can keep pollution away from your shores while buying the beneficail resources (like farmland) at cheap.

Resources go where money is. Now, resources can be either agriculture lands or skilled labor. If you expand the market by adding lots of poor countries to your free trade alliance, you'll notice that the rich countries get way more richer at faster rate than poor countries.

Think about an EU where every country is equally rich and has equally wealthy population.

Then buying large farmland in Romania will be cost as much as in Germany and what happens next? Romanian companies might also end up owning large lands in Germany.

How is that beneficial for rich members of EU to make poor ones richer? You end up losing country over your country's resources to foreign power.

China knows this and that's why they invest in poor countries to create a bigger market on favourable trade terms. Now, these terms don't even need to biased in favour of China if China deals with poor countries as the naturally China being richer will benefit from the effect outlined above.

So China doesn't need to be unfair to win and become rich while extracting resources from poor countries they invest in.

Is it good, bad or evil? Depends on how you think about other players like Sacadinavia and Western Europe. I don't know why we should treat China any different if I am a poor European country.

[cerealbad]

it's a scattershot approach. the size of china and it's appetite for growth means it invests everywhere, its concentrated wealth and power is being dispersed globally in order to throw as many seeds as possible and water the ones that seek to grow. they're in africa, south america, eurasia, se asia, oceania, western europe, the middle east. it's very similar to what japan and south korea did domestically with miracle recoveries in their respective post war periods - but on a completely global scale. you give everyone a chance, and reinforce the ones who take it with good faith, the bad self-prune themselves and behavior can now be correlated to outcome. never throw good money after bad, and always work out some deal when you get something in return for something.

china needs this to work, or it is facing a real crisis (constitutional, demographic, cultural) in the near future. the middle income trap leads to stagnation and possible revolution unless you can centralize population (it needs 100 tokyos) and largely flatten your wealth distribution before it happens, but avoiding it is preferential to dealing with its effects.

the idea that china is doing this alone is also a fantasy, in reality it's working within the global system of international lending and finance to open as many doors as possible to trade, growth, accelerated development and good outcomes for domestic populations. european and american funds can't get through the door fast enough to get behind chinese at scale manufacturing and development of the undeveloped parts of the world.

i think they will fail, but for largely unmentioned and unrelated reasons to the ones presently discussed. any system like china will risk total collapse around leadership changeover, and it needs more than 20 years to achieve new stability goals and at that moment - when xi dies - it requires a stable partner to secure the hand off, and at the rate of hysteria in america, two decades from now, i can see capricious opportunism on the part of a deflated western elite take over sound judgement and prudent long term thinking. the quiet horror of the thousands of kilometers of abandoned high speed rail like skeletal bones across the world as we enter some new global minimum is vividly in my mind as i think of the most likely outcomes.